#B1June: What Is Block.one Doing with 9.8M EOS?

We are moving into the final week ahead of #B1June – Block.one’s major event that will take place in Washington DC next weekend.

As we reported a few days ago Block.one surprised everyone by unstaking 9.8M EOS that it had previously vested. There were lots of rumors and speculations as to the purpose behind such a huge anticipated capital movement. At time of unstaking this EOS stash was worth close to $60M. With this weekend’s price spike it is now worth close to $80M.

We ran a public opinion poll to find out what others believe will be the most likely use of this cash. A vast majority of respondents believed that Block.one will spend this money stash on the EOS resources for its new dApp.

Basically, the idea here is that Block.one are positioning themselves to launch some sort of an internally developed dApp (a new social media platform for instance) for which it will need EOSIO resources.

What Happened Today?

And today multiple sources reported that Block.One just made a gigantic purchase of RAM: 3.3M EOS worth (or $20M) to be precise.

In case you are new to EOS and/or need a refresher, here’s a definition of RAM posted on the EOS New York site:

RAM is required to store data on the blockchain and must be purchased. You get a set number of bytes of storage based on the current RAM market price. The price automatically adjusts up and down with buying and selling action. When you release storage you can sell RAM back to recover EOS at the current ram market price.

Rob Finch of Cypherglass and Zach Gull of Everything EOS just ran a livestream video discussing this investment. You can watch it here:

What Are the Implications?

There are multiple implications of this action. Some are positive and some are negative, depending on which side of the fence you are on.

New dApp on EOS Mainnet

One of the most obvious positive implications of this massive RAM purchase is that Block.one is most definitely planning to launch its new dApp (whatever it might be) on the EOSIO mainnet. This is to refute any speculations that the new dApps will be launched on some form of a new chain.

REX

16,500 EOS that B1 paid in RAM fees on this transaction went straight into the REX pool distributed to the stakeholders.

Because RAM prices skyrocketed as a result of this purchase (see below) and dApps still need to use RAM to run their operations, a demand for borrowing EOS to stake it for RAM will drive the interest rates on the staked EOS tokens higher. So technically, those investors who staked their EOS on REX should see a nice increase in interest rates received on their staked EOS tokens.

Not New Accounts

As Rob Finch explains in the video, in order to set up a new account on EOSIO mainnet one can only purchase new RAM specifically for this new account at time of account creation. This means that all this new RAM will NOT be used to set up millions of new account as some people speculated.

RAM Prices

As expected, following the transaction prices of RAM have skyrocketed to about 0.14 EOS ($1.0) per kilobit

You can see the crazy price action in this chart below:

According to Fred Krueger of Lynx wallet it takes 2K of RAM to set up each new account. This will now equate to approximately $2.2/account for all of the dApps:

If you are a new dApp launching on EOS and you planned to subsidize new accounts onboarding in your dApp, this may have become prohibitively expensive to do in an instant.

However, higher RAM prices and higher new account setup costs for some mean great opportunities for others. Liquid Apps that offers vRAM (V for virtual) will surely have an increased demand for its services in these upcoming days. Here is how they define vRAM:

vRAM is an alternative storage solution for developers building EOS dApps that is RAM-compatible, decentralized, and enables storing & retrieving of potentially unlimited amounts of data affordably and efficiently.

Speculations

What do you think is Block.one will be releasing this upcoming Saturday at the #B1June event in Washinton, DC? Leave your thoughts in the comments below.

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